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Dairy Robotic Milking Systems – What are the Economics?

With over 35,000 robotic milking systems or RMS units in operation on dairy farms worldwide, the dairy farms can expand without having to hire additional labour thus improving their lifestyle and profitability. In this article, Fullwood Packo explains further.

What Drives Robotic Profitability?

The main driving factors of profitability are labour savings, milk production, and the length of life. Unfortunately, there is also a disadvantage in that the capital investment is anywhere from £116,000 to upwards of £155,000 per robotic milking unit. Per historical data, most of the milking robots are a bit less profitable than that conventional milking systems in that they will only milk from 50 to 70 cows each for that cost. However, thanks to modern technological advancements, and the higher cost of labour, there is hope that these results will change quickly.

Efficiency of Labour

Per the 2016 USDA labour reports, lost wages in livestock workers increased from 3 per cent in 2014 upwards to 4 per cent in 2015. The savings of RMS will vary per dairy. Typically, researchers have reported anywhere from no savings to 29 per cent savings by utilising RMS. Some of the variations may be as simple as barn design and management. Per Farm Management Records (Finbin, 2016) the average Upper Midwest RMS averaged 2.2 million pounds of milk per employee in comparison to 1.5 million pounds for smaller herds in milking parlours.

Other contributing factors include the installation of robots, availability of labour for the milking cows, and the availability of immigrant workers for labour. The future of this labour may be reduced if tighter immigration laws were passed in the US.

Milk Production Changes when Transitioning to Robotics

The average change for milk production utilising RMS has found that the robotic herds increase anywhere from 5 to 10 per cent in comparison to a decrease in milking. Per the survey, the typical RMS frequency is 2.8. The goal is to have an improved milking frequency in early lactation and reduce the milking frequency in later months of lactation. Such factors include the following:

  • Robots per cow;
  • Permission settings;
  • Quality and palatability of partial mixed rations and robotics box feed;
  • Idle time of robots;
  • Cow fetching;
  • Design of barn and walking distance;
  • Conventional vs robotic milking systems.

When considering the economic performance of (for example) Dutch farms utilising RMS to other closely identified conventional farms, milk production was increased by two times the amount. Due to the higher cost of RMS, conventional farms were more profitable. Unfortunately, the labour requirement was as much as 29 per cent lower on the RMS farms which resulted in increased milk production and thus increased income per worker. Investing in an RMS will allow farms to milk more cows and thus, produce more milk with less labour.

Milk Per Robot

It’s vital to maximise the profit to maximise the daily milk production per robot. Example: In a four robot system that is using a 2 per cent annual inflation of wages over a 20-year time horizon, the net income will increase by about £3170 for every 500-pound increase in daily milk per robot. Thus, many US farms are bringing in an excess of 6,000 pounds of milk per robot daily. It’s important to note that this is under optimal conditions and many variables will affect. Achieved via a high milk production per cow and the number of cows per robot many contributing factors will ensure that production is at its maximum yield:

  • Cows must be milked at the proper times;
  • Milk permission settings;
  • Reduced time in box per cow;
  • RMS must be in top working order at all times.